Major Hidden Rehab Costs
I get my potential rehab homes from wholesalers and I can do a walk through before tying it up with a deposit (usually 5k). I work in a very competitive market (Tampa, FL) so I can’t usually put any contingencies other than a lien contingency on getting my deposit back. I can spot the standard cosmetic repairs like kitchen/bath needs upgrades, needs paint, flooring, old shingles need replacing, etc and I’m pretty confident in my ability to determine ARV based on comps. My biggest concern is there is a “hidden” major repair cost.
What are the standard things you look for on a walk through? What are the major repairs costs to look out for (hidden and visible)? Thanks
Water damage opportunities. Water is the greatest enemy of all construction. It is amazing how much damage a structure can sustain without offering any interior clues.
Look closely at window sills and brick molds, and door thresholds, jambs, and brick molds.
You are looking for any place where water can, or has, penetrated into the wall and/or sub-floor/framing.
Gaps in siding, or no caulking to seal joints in siding at trim pieces, brick molds, around other penetrations.
Poorly done siding, fascia, trim details that funnel water into the structure.
Look for places where previous owner has allowed a handyman to smear tar or caulking on a roof, particularly with two or more evident repairs in the same place. Indicative of ongoing, unaddressed leak.
You should assume some rotten wood if there is evidence of multiple repair attempts. Look into the attic if possible. It can get costly reframing around chimneys.
Grade level too close to sill plate. Make sure water has the opportunity to drain away prior to washing up on the foundation and getting to the sill.
No one of these needs to be a deal breaker, but added together, they can be a heart breaker.
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Mike J
Elevate Your Game![ Edited by mikejaquish on Date 02/02/2006 ]